The issue of letters of credit (LCs) has strongly affected the two sectors in particular: construction (read steel) and pharmaceutical.
While the pharma industry has sought government’s intervention to help ensure its survival, the construction industry has suspended purchases of steel bars for one week.
Although the latter sector has cited the unprecedented hike in the prices of steel bars (over Rs 300,000 per tonne as of today), the former has sought to increase prices of drugs. But both of them have called upon the government to help ease LCs restrictions.
Both the sectors are beset with constraints in import of raw materials. Steel-making units cannot manufacture steel without iron ore - an imported item. Pharma sector too is greatly dependent on imported items, including active ingredients, to manufacture medicines.
The resultant shortage of the products produced by these two sectors has caused immense hike in prices of their items.
Moreover, a slowdown in construction industry has found its best reflection from growing joblessness numbers in labour market while scarcity of a large number of drugs is exacting its toll on patients.
This state of affairs must not be allowed to perpetuate. The government must act decisively and urgently.
Sohail Khan (Karachi)
Copyright Business Recorder, 2023
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